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Topic: Chas and Dave are US citizens visiting Australia on a 6-month tourist visa. They have fallen in love with the country and the free spirit of Australians. Shortly into their visit, they decide...

Topic:
Chas and Dave are US citizens visiting Australia on a 6-month tourist visa. They have fallen in love with the country and the free spirit of Australians.
Shortly into their visit, they decide to set-up business with a couple of Australians they have met, Sally and Lindy.
The group organize a ‘Celebrate USA Day’ for July 4. The event was held on an isolated beach in North Queensland. Publicity for the day was all through social media. The event drew a crowd of about 300 on and off throughout the day.
Entertainment for the day was provided by backpackers who could sing, play an instrument, read tarot cards, do acrobatics or anything else that might be entertaining.
Chas, Dave, Sally and Lindy cooked all the food and obtained alcoholic and non-alcoholic drinks and sold these on the day.
All attendees paid $5 cash to attend. The entertainers received donations from the crowd as if they were busking. Chas and Dave and Sally and Lindy made $3000 profit on sales of food and drink.
After the event Chas and Dave cleaned up the litter and no one could tell the event had been held.
The organisers had not obtained any permissions to hold the event and as all transactions were in cash, they did not intend accounting for any tax.
The proceeds were split evenly between Chas, Dave, Sally and Lindy. After the event, they all continued to travel together until Chas and Dave left Australia to return to the USA in early November.
Questions:
1.    Was there a partnership between Chas, Dave, Sally and Lindy? Provide arguments for and against. (15 marks)
2.    If you decide it is not a partnership or may not be a partnership, how would you categorize the business relationship? Explain why you think this is the case? (3 marks)
3.    What do you think of the organiser’s behavior in not obtaining any authorisation to hold the event and not paying tax on their earnings? (2 marks)



Oct 07, 2019
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